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Military pension reform supercommittee to hold inaugural meeting on Monday

May 29th, 2021

Military pension reform supercommittee to hold inaugural meeting on Monday; Salceda assures no diminution of benefits in pension proposal

The House Ad Hoc Committee on the Military and Uniformed Personnel (MUP) Pension System, chaired by House Committee on Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) will hold its organizational meeting on Monday, May 31, following its creation as a committee during the plenary session May 24.

The mandate of the Committee includes “all matters related to the MUP pension system, including funding and revenue sources, management, and benefits and contribution scheme.”

The Committee will discuss its rules and Salceda is slated to present his initial observations on the fiscal condition of the military pension system, which he says is “at serious risk of being unfundable in the future.”

“The issue here isn’t whether military and uniformed personnel deserve more or less pension benefits. Everyone who serves the country always deserves more. They deserve to be sure they will have pension, and right now, given the system, we’re not sure the country can afford it in the future,” Salceda said.

“If we can’t fund the pension system in succeeding years, salary increases for current MUP will also be in trouble. So we have to make this work,” Salceda added.

House supercommittee “shows key importance” of pension reform

An ad hoc committee is among the most important groups in the House in the order of precedence, as it is typically created to complete a priority measure.

The Committee is also composed of some of the highest-ranking members of the House. The Vice Chair of the Committee is Appropriations Chair Eric Go Yap, while members are Deputy Speaker Isidro Ungab, National Defense and Security Chair Raul Tupas, Public Order and Safety Chair Narciso Bravo, Government Enterprises and Privatization Chair Eric Olivarez, and Economic Stimulus and Recovery Cluster Co-Chair Stella Quimbo.

“It’s a powerhouse Committee with some of the highest-ranking members in the leadership team. So, it reflects the importance Speaker Velasco and the leadership places on this reform,” Salceda said.

Save the MUP pension system

The MUP pension system, which requires no contributions from active members and is fully funded by the national budget, has “reached unsustainable levels,” Salceda says.

“Joint Resolution No. 1 s. 2018, which nearly doubled the salaries of the MUP also came with the condition that we should undertake pension reform. So, we are merely completing the mission we agreed to when Congress passed the salary increase,” Salceda explained.

“Right now, pension spending already exceeds the maintenance and other operating expenses or MOOE of the MUP services. By 2035, in fact, MUP pensions alone would already account for two-thirds of our target deficit, leaving us little room to hire more soldiers, modernize equipment, or strengthen training and military hardware,” Salceda added.

“The argument for the current system is that MUPs expose themselves to unique risks when they enter the service. That is a valid argument for additional risk compensation not for unsustainable pensions. Those who actually incur the risks should be compensated for doing so. Under the current system, benefits for MUP who are killed or injured in the line of duty is on the lower end, because they tend to be of lower rank. So, let’s make the pension sustainable and increase benefits for line-of-duty injuries or deaths,” Salceda said.

Meanwhile, Salceda assured pensioners that “there will be no diminution of benefits. No one will have their current pensions reduced.”

“I’m also working with the Department of Finance and the Bureau of Treasury to see which assets we can use to defray some of the pension costs, so that we won’t have to charge all of it against the national budget or the MUPs,” Salceda added.

“This is not easy, and this is not popular. But the choice is between some pain now, or a lot of pain in the future.

I can’t in good conscience do nothing when it’s obvious that the status quo will cause trouble for future generations. It’s irresponsible to say ‘bahala na’ now and just wish that someday we still have money to pay MUP pensions,” Salceda said.

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